The Kellogg Real Estate Club had the pleasure of hosting Jeffrey Hines during our Executive Speaker Luncheon series this year. Mr. Hines discussed leadership traits, prevailing market trends, and the growth of Hines from a one-man Houston development company into a global real estate investment firm that now manages $89.1 Billion.

When asked about leadership, Mr. Hines emphasized the importance of being resilient, working well with people, and understanding how to pivot. Real Estate is an ever-evolving industry that changes according to macro fundamentals and micro trends. Having the ability to develop relationships and foster trust will enable you to create new lines of business during uncertain times. Hines was able to pivot from a pure development company into more of a private investment firm by leveraging their ties with trusted capital partners and their proven real estate acumen.

Their investment strategy differs from other firms, in that their acquisition model is not based on traditional economic measures like supply and demand, rent growth, population growth, wage growth, political climate, and regulatory issues. Instead, in addition to these metrics they look at absolute and relative pricing for particular assets or submarkets. They have seen that these metrics are the most highly correlated to real estate returns. They use this model to augment all of their acquisition/disposition strategies.

In closing, Mr. Hines discussed his outlook on the market and projects they had in the pipeline. While most experts believe we are close, if not at the peak, he believes there are still some opportunities available especially within the United States. Due to loosening foreign investment regulations and changing preferences among millennials, creative buildings in urban settings will continue to do well into the future. This approach is shown in their all wood frame seven-story office tower going up in Minneapolis, coined T3 (Timber, Transit, and Technology). There will be exposed wood, a large co-working and social space, along with a rooftop patio. Their ability to deliver projects like this alongside River Point (a 52-story A+ office building on the Chicago river) is why Hines is and will continue to be a world class real estate institution.